Uruguay : 2016 Article IV Consultation-Press Release and Staff Report

Prudent macroeconomic policies, strong institutions, and a commitment to diversify its markets and products have allowed Uruguay to show resilience in the face of sharp recessions in its large neighbors. Nevertheless, economic growth slowed down in 2015 and 2016 while inflation remains above target. In 2017, an improving regional environment is expected to contribute to a modest further recovery, while inflation should slowly converge towards the target range. Given rising debt and high inflation, the room for more expansionary fiscal or monetary policy is limited.